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GuruFocus has detected 7 Warning Signs with Natures Sunshine Products Inc $NATR.
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Natures Sunshine Products Inc (NAS:NATR)
Beneish M-Score
-2.30 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Natures Sunshine Products Inc has a M-score of -2.30 suggests that the company is not a manipulator.

NATR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.44   Max: -0.4
Current: -2.3

-3.44
-0.4

During the past 13 years, the highest Beneish M-Score of Natures Sunshine Products Inc was -0.40. The lowest was -3.44. And the median was -2.53.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Natures Sunshine Products Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0179+0.528 * 1.0009+0.404 * 1.2295+0.892 * 1.0576+0.115 * 0.995
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0045+4.679 * 0.0093-0.327 * 1.0701
=-2.30

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $8.8 Mil.
Revenue was 83.098 + 83.95 + 85.441 + 89.366 = $341.9 Mil.
Gross Profit was 61.37 + 59.623 + 63.929 + 66.288 = $251.2 Mil.
Total Current Assets was $97.7 Mil.
Total Assets was $210.7 Mil.
Property, Plant and Equipment(Net PPE) was $74.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.1 Mil.
Selling, General & Admin. Expense(SGA) was $241.2 Mil.
Total Current Liabilities was $66.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 2.16 + -6.653 + 4.155 + 2.568 = $2.2 Mil.
Non Operating Income was 1.275 + -1.73 + 0.02 + -0.622 = $-1.1 Mil.
Cash Flow from Operations was 0.774 + -1.645 + -1.401 + 3.601 = $1.3 Mil.
Accounts Receivable was $8.1 Mil.
Revenue was 82.402 + 79.994 + 79.586 + 81.247 = $323.2 Mil.
Gross Profit was 60.382 + 58.241 + 58.943 + 60.179 = $237.7 Mil.
Total Current Assets was $110.0 Mil.
Total Assets was $210.5 Mil.
Property, Plant and Equipment(Net PPE) was $69.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.7 Mil.
Selling, General & Admin. Expense(SGA) was $227.1 Mil.
Total Current Liabilities was $62.2 Mil.
Long-Term Debt was $0.0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(8.77 / 341.855) / (8.146 / 323.229)
=0.02565415 / 0.02520195
=1.0179

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(237.745 / 323.229) / (251.21 / 341.855)
=0.73553116 / 0.73484372
=1.0009

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (97.718 + 74.733) / 210.74) / (1 - (109.997 + 69.374) / 210.475)
=0.18168834 / 0.14778002
=1.2295

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=341.855 / 323.229
=1.0576

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(4.699 / (4.699 + 69.374)) / (5.089 / (5.089 + 74.733))
=0.06343742 / 0.06375435
=0.995

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(241.24 / 341.855) / (227.083 / 323.229)
=0.70567931 / 0.70254525
=1.0045

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((0 + 66.687) / 210.74) / ((0 + 62.238) / 210.475)
=0.31644206 / 0.29570258
=1.0701

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(2.23 - -1.057 - 1.329) / 210.74
=0.0093

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Natures Sunshine Products Inc has a M-score of -2.30 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Natures Sunshine Products Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.14841.39220.85480.70291.57860.97521.03170.68071.29050.9565
GMI 1.00480.99371.01510.99590.98941.08750.99570.99891.01741.0051
AQI 1.59180.92951.33370.75940.90980.73170.89431.29251.22741.0367
SGI 1.01221.040.89961.02011.05110.99911.02890.9690.88631.0507
DEPI 0.91541.21171.12661.00670.90911.16131.04031.54771.28021.0032
SGAI 2.070.99850.96391.00320.98180.86381.04921.01810.99491.0138
LVGI 0.88561.0190.86790.9931.02530.91331.02830.74760.90061.1572
TATA -0.1278-0.01040.0177-0.12450.0752-0.008-0.0652-0.02230.03230.0003
M-score -2.85-2.15-2.41-3.41-1.61-2.53-2.79-2.65-2.00-2.51

Natures Sunshine Products Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.68070.74860.85360.92971.29051.10491.1820.95350.95651.0179
GMI 0.99891.00971.01171.02041.01741.0131.00831.00031.00511.0009
AQI 1.29251.06541.01181.17861.22741.21311.231.08351.03671.2295
SGI 0.9690.93940.90320.85720.88630.91180.97051.0341.05071.0576
DEPI 1.54771.69581.61741.53921.28021.07520.99350.98491.00320.995
SGAI 1.01811.01251.0110.98090.99491.00861.00171.0081.01381.0045
LVGI 0.74760.77440.79570.91660.90061.06061.06261.10831.15721.0701
TATA -0.021-0.0379-0.025-0.01980.0255-0.0197-0.01450.021-0.00250.0093
M-score -2.64-2.76-2.67-2.59-2.03-2.47-2.33-2.40-2.52-2.30
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